Emissions Trading Begins

The NZ emissions trading scheme launches in NZ today. It’s a market-based mechanism putting a price on carbon emissions as a means of holding back climate change, or more correctly, a step towards full-cost accounting in the environmental arena.

It’s a good thing. The ETS is riddled with holes and problems, according to sources I trust (e.g. this book co-authored by the very smart economist and all-around good egg Geoff Bertram), but fundamentally I’m pleased that we’ve managed to get a price of some kind on at least some of the carbon emissions generated out of NZ. There has been a fair bit of shouting about the ETS, including a protest at Parliament and lots of letters to the editor, but my impression is that these objections didn’t run deep – the public perception is in support of an ETS (c.f. Now We Have Won).

The Key government has delivered something worthwhile here, for all their many flaws. Yes, it is a full six months after the deadline Key set for imposition of the ETS, but it’s still 2010 – not too late to get changes rolling. So Key, in the end, wasn’t a Rodney – well, not as much of one as I feared. I suspect Nick Smith deserves some kudos for this, because you can be certain he was talked to about backing down from the ETS plenty of times but he has withstood this pressure. Well done that man.

The international effects of this will not be small, either. We are another country putting our markets where our mouths are, and even if we’re not nearly at the level the science calls for, we’re part of a growing consensus that action is needed and needed now. Our ETS will influence our trade partner nations and others besides. It’s a worthy and important position in which to be.

It’s important to note, however, that this isn’t the end of the story, but rather the long-delayed beginning. As Bertram & co’s book notes, our ETS needs to be improved, made more fair and comprehensive and convincing. Ordinary households are going to feel the bite at the petrol pump and the power bill, with corporations relatively insulated from the new costs – that needs to change. Popular support for the ETS needs to continue at the current level despite the extra costs starting to pinch. Indeed, popular support for the ETS needs to grow. It’s a massive communications challenge and one the current government will think twice about working on, especially if it starts to hurt their electability. Once again, the responsibility falls at the feet of ordinary people like me and you to think about the scheme, judge the costs worthwhile, and spread that message around.

Anyway. It’s a good day. I’m happy.

4 thoughts on “Emissions Trading Begins”

  1. Anything that pissed off Paul Henry this much *has* to be a good thing.

  2. Anything that begins to truly account for the impact our activity has on the environment is a good thing. It’s a step towards fixing one of the fundamental problems I have with capitalism and the free market

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